Demand-pull inflation
What is "demand-pull" inflation?
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This is a common form of inflation in which demand outstrips supply to cause a rise in price and therefore inflation. In the AD AS approach in macroeconomics, it is shown as a continuous rise in AD with a constant AS. This rise can be due to a rise in any of the components of AD- consumption spending, investment spending, and government spending or net exports. If the economy is not on full employment level then the rise in price is accompanied by a rise in GDP as well. However if the economy is already at full employment then there is no rise in GDP, only price rises. This kind of demand pull inflation is less acceptable and more damaging to the economic agents.
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Question: Some commentators have argued that the failure of the "Supercommittee" is good thing for the economy? Do you argree? Answer: Discover Q & A Leading Solution Library Avail More Than 1442033 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1936308 Asked 3,689 Active Tutors 1442033 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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